The share of equity-rich homeowners in the U.S. retreated toward the end of 2025, falling to its lowest level in four years as the market shifted away from the rapid appreciation trends of the recent past.

According to newly released fourth-quarter 2025 data from Attom, 44.6% of mortgaged residential properties in the United States were considered equity rich, meaning they have combined loan balances of no more than 50% of their estimated market value.

This figure represents a decline from 46.1% in the third quarter of 2025 and is down substantially from the recent peak of 49.2% recorded in the second quarter of 2024. The fourth quarter marked the lowest share of equity-rich properties since late 2021.

Simultaneously, the market saw a modest uptick in distressed equity positions. The portion of “seriously underwater” properties — those with combined loan balances exceeding the property’s estimated market value by at least 25% — rose to 3% in the fourth quarter, up slightly from 2.8% during the prior quarter.

Despite the quarterly slide, Attom CEO Rob Barber suggests the data reflects a normalization of the market rather than a collapse.

“After years of rapid gains, homeowner equity is settling into a more sustainable range, and that’s not a negative sign for the market,” said Barber in a statement included with the figures. “Even with a modest pullback in equity-rich properties and a slight uptick in seriously underwater homes, overall equity levels remain remarkably strong by historical standards.”

He added that as the market moves toward the spring buying season, the data suggests a housing sector that is “stabilizing rather than overheating,” providing homeowners with a solid financial foundation while allowing for healthier market dynamics.

The report reveals a geographic split in equity performance. High-cost markets in the Northeast and West regions continued to dominate the top tier of equity-rich rankings, driven by higher home values and long-term price growth.

Vermont led the nation by a wide margin, with 87% of mortgaged homes classified as equity-rich, followed by New Hampshire (60.2%) and Rhode Island (59.4%).

In contrast, the South and Midwest saw softening equity levels. Florida, for example, experienced a decrease from 50.9% in the fourth quarter of 2024 to 43.9% in the last quarter of 2025. Louisiana ranked last in the nation, with only 20.1% of mortgaged homes considered equity rich.